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Equities

Nikkei Asia300 Index slips amid rising US yields

Country gauges for Hong Kong and China defy regional losses to climb

HONG KONG (Nikkei Markets) -- Asian stocks edged lower on Tuesday as investors in equities took to the sidelines while the yield on the 10-year U.S. Treasury note continued to rise, stoking fears of selloff in equities.

The Nikkei Asia300 Index edged 0.1% lower to 1,418.90, while the ASEAN index for Southeast Asian companies lost 0.8%. Tuesday's tepid trading came after indexes on Wall Street ended mixed on Monday, while the yield on the 10-year U.S. Treasury note closed at 2.973%. Investors are also watching trade relations between the U.S. and China.

"The U.S. 10-year Treasury yield is attempting to test the critical 3% peak again," Olivier Korber, a strategist at Societe Generale, wrote in a note to clients. "Such a break in USD rates space would propel the dollar higher, especially if risk assets are hurt, triggering a flight-to-quality reaction."

The gauges for Hong Kong and China climbed 0.8% and 1.4%, respectively. Mainland markets will close next Monday and Tuesday for Labour Day holidays, while Hong Kong will shut on Tuesday.

Internet major Tencent Holdings rose 0.7% after shedding 2.9% over the last two days, while mainland financial heavyweights Industrial & Commercial Bank of China (ICBC), China Construction Bank (CCB) and Ping An Insurance Group rose 2.4%, 2.2% and 1.5%, respectively.

Pork producer WH Group advanced 3.1% ahead of its first-quarter earnings report, due later on Tuesday.

Great Wall Motor, which is due to report March quarter earnings on Tuesday, added 1.2%.

China Railway Construction advanced 1% after reporting a 7% increase in the value of newly signed contracts for the March quarter to 279.9 billion yuan.

In Taiwan, contract chipmaker Taiwan Semiconductor Manufacturing edged 0.2% higher following a 7.4% drop over the last two days after it trimmed revenue outlook for the year and warned of softening smartphone demand. The revised forecast drove losses for Apple in New York and suppliers to the iPhone maker across the globe. Hon Hai Precision Industry, also known as Foxconn, fell 2.9% in Taipei on Tuesday, its third consecutive loss.

The country gauge for Taiwan dropped 1%.

South Korea's index shed 1.2%, dragged down by losses for technology companies. Heavyweight Samsung Electronics slid 2.8%, while SK Hynix shed 2.7%. On Tuesday, semiconductor maker SK Hynix reported a 77% jump in first-quarter operating profit, meeting market expectations, but warned of a slowdown in the growth of shipments for mobile chips.

Steelmaker POSCO dropped 1.1% in Seoul. At the end of the day's trading, the company on Tuesday reported a 9% increase in first-quarter operating profit and a 5% increase in revenue. POSCO raised its 2018 sales target to 63 trillion won ($58.5 billion) from 61.9 trillion won earlier.

In India, Bharti Airtel edged 0.6% higher ahead of its fourth-quarter results announcement, due after markets close on Tuesday.

Aluminum producers Hindalco Industries and Vedanta slid 2.3% and 7.4%, respectively, in Mumbai as prices of the metal extended losses. Tuesday's drop came after the U.S. extended a deadline for the American customers to wind down their business with Russian aluminum producer United Company Rusal and comply with sanctions.

India's index slipped 0.3%.

--V. Phani Kumar

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